talent management

If you’re looking to fill a role by promoting from within, you’re potentially setting yourself up for failure. While promotions are often well-deserved and well-executed, sometimes, promoting the wrong person can spell disaster. When promoting from within, it’s critical that you avoid falling victim to the Peter Principle. Here’s what you need to know about this little-recognized but all-too-real risk of promoting your employees.

The Peter Principle at Work

Dr. Laurence Peter formulated the Peter Principle in 1968 as an explanation for why incompetent people get promotions. In his book The Peter Principle, Dr. Peter asserted that “the cream rises until it sours”.

In other words, highly competent and skilled workers receive promotions through the ranks of an organization. They continue to receive promotions until they reach a position they have neither the knowledge nor the skills to perform.

The Peter Principle has long been criticized as simply a neat theory. However, recent research has shown that it’s an accurate reflection of corporate hierarchies. One 2018 analysis of over 53,000 sales staff at over 200 companies found that the best salespeople were the most likely to be promoted to managerial positions – and the most likely to perform poorly as managers. The researchers concluded that “the best worker is not always the best candidate for manager.”

The Peter Principle can be seen at work in the 2005 sitcom The Office. Regional manager Michael Scott, while friendly and outgoing, is nonetheless a poor manager. He makes irrational decisions and wastes a considerable amount of time. However, when Scott acts as a salesman, he continually demonstrates a high degree of intelligence, a winning personality, and a persuasive charm that wins over his clients. It was his strong sales record as a salesman that led Scott to be promoted to regional manager. Now, though, he lacks many of the managerial skills needed in a professional workplace.

The Paula Principle

In 2017, educational philosopher Tom Schuller published The Paula Principle, a follow-up to The Peter Principle that aims to explain why women underperform. According to Schuller, the Paula Principle states that “Most women work below their level of competence.”

Schuller argues that bosses fail to recognize women in particular for their competence and performance. He says women often work in positions that under-utilize their full skill-set. 

“Women’s career paths are flatter and more broken, their salaries lower, and their retirement incomes smaller,” Schuller writes. In The Paula Principle, Schuller lists five factors to explain why women underperform relative to their level of competency. These factors range from discrimination to lack of childcare to lack of self-confidence and beyond.

How Over-Promotion Can Derail Your Business

The Peter Principle can have myriad effects on your business. When bosses promote workers above their competency, it can show up in ways both predictable and surprising.

For instance, you might notice that recently-promoted employees are suddenly less productive than before – or that they make more mistakes. Perhaps they spend too much time on menial tasks, or maybe they suffer from lower morale.

Over time, these issues can compound and grow. And if you continue promoting employees above their level of competency, you can fall victim to Peter’s Corollary.

Peter’s Corollary states that “in time, every position within an organization will be filled with someone who is not competent to perform the duties of that role.”

By promoting your employees above their level of competency, you’ve created an organization where nobody knows what they’re doing. And when nobody knows what they’re doing, it results in less productivity and more mistakes.

So how can you ward off the Peter Principle? How can you ensure your employees continue to perform well even after giving them well-deserved promotions?

Mitigating the Peter Principle in Your Workplace

The first thing you should understand is that the Peter Principle isn’t evidence of a hiring mistake. It doesn’t necessarily mean you promoted the wrong person to the wrong position, or that it was wrong to hire that person to begin with. Rather, the Peter Principle means the person chosen to fill a role is not currently prepared to perform their duties.

When it comes to mitigating the Peter Principle, there are two important strategies to take: Prevention and mitigation.

If you’ve already promoted someone who’s ill-suited for their new role, you can mitigate that error by giving your recent promotee leadership training and skills training to help them adjust to their new job.

Going forward, you can prevent the Peter Principle from impacting your workplace with a series of new initiatives.

First, you’ll want to implement a new leadership training program for recently-promoted employees. You’ll want to design this program to equip these employees for their new roles by focusing on their new duties and on managerial best practices.

Next, you’ll want to create employee mentorship programs whereby your high-performers can gain new skills and knowledge by observing others. Mentoring and nurturing employees is a great way to ensure they’re prepared for their new roles.

You can also create new rewards incentives for high-performers, like raises and bonuses, in lieu of promotions. These incentives could also be tangible rewards like hockey tickets or gift certificates for restaurants. When you can offer multiple performance rewards beyond just promotions, you’ll be able to promote only the people who are prepared for a new role.

You can create learning cohorts among employees who are up for promotions. This strategy can help your promotees lean on each other for support and help each other learn the job.

Create a New Promotion-Track Program

Finally, you’ll want to open up a number of non-managerial opportunities so that high performers can be promoted within their competency. When the typical promotion track involves promoting tactitians to managers, you’re often forcing your people into a role they aren’t prepared for and don’t have the skills to perform. While someone may be excellent at their current role, that doesn’t necessarily mean they have the temperament and personality needed for a managerial role. So if you can instead offer senior-level and specialist positions that are based on current employees’ skills, you can promote your high-performers without it negatively affecting the rest of your team.

The Peter Principle is a notable threat to productivity and revenue. Without careful monitoring, your organization could quickly find itself in a position of resource waste and incompetent management. But with the proper training programs and skills-based rewards initiatives, you can ensure the right people fill the right positions and keep your organization firing on all cylinders.

How is the Peter Principle affecting your business? What are you doing to give your leaders more skills training?